FRDPX
Franklin Rising Dividends-A
Introduction to Franklin Rising Dividends-A
Franklin Rising Dividends-A (FRDPX) is a mutual fund designed to provide long-term capital appreciation by investing primarily in equity securities of financially sound companies that have consistently increased their dividends. Managed by Franklin Templeton Investments, this fund falls under the Large Cap category and is particularly appealing to investors seeking equity-income with a focus on dividend growth. With an expense ratio of 0.84%, FRDPX offers a balanced approach to growth and income, making it a suitable choice for those looking to capitalize on the stability and potential of large-cap stocks.
At A Glance
Executive Summary
FRDPX focuses on large-cap stocks with rising dividends, offering a 0.84% expense ratio and 0.80% yield, ideal for growth-oriented investors.
Focus on rising dividends Strong large-cap exposure Solid historical returns
Higher expense ratio Lower yield compared to peers Negative alpha performance
Performance Analysis: Navigating Market Dynamics
FRDPX has demonstrated a mixed performance over various time frames. Over the past year, the fund has achieved a notable return of 24.45%, although it trails its benchmark, the S&P 500 Total Return Index, which posted a 37.62% return. The fund’s five-year annualized return stands at 12.22%, while its ten-year return is 11.02%, indicating a consistent performance over the long term. However, the fund’s negative alpha of -13.22% suggests it has underperformed relative to its benchmark on a risk-adjusted basis. Despite this, the fund’s beta of 0.70 indicates lower volatility compared to the market, which may appeal to risk-averse investors.
Portfolio Composition: A Focus on Technology and Industrials
The portfolio of FRDPX is heavily weighted towards the Technology sector, which constitutes 26.44% of its holdings, followed by Industrials at 18.06% and Health Care at 16.51%. This sector allocation reflects the fund’s strategy of investing in companies with strong growth potential and consistent dividend increases. Notable top holdings include Microsoft Corp (8.54%), Roper Technologies Inc (3.63%), and Linde PLC (3.41%). The fund’s focus on large-cap stocks is evident, with 47.22% of its assets in large-cap companies and 30.58% in extra-large-cap companies, providing a robust foundation for growth and income.
Risk Metrics: Understanding the Fund’s Volatility
FRDPX exhibits a relatively low beta of 0.70, indicating that it is less volatile than the broader market. The fund’s standard deviation of 2.83% further supports its stability, making it an attractive option for conservative investors. However, the fund’s Sharpe Ratio of -1.35 and Treynor Ratio of -18.80 highlight challenges in achieving risk-adjusted returns. The fund’s downside risk, measured by a downside risk (UI) of 1.63, suggests a moderate level of risk exposure. Despite these metrics, the fund’s max drawdown of -4.8% and quick recovery period of two months demonstrate resilience in adverse market conditions.
Comparative Analysis: How FRDPX Stacks Up Against Peers
When compared to similar funds, FRDPX offers competitive returns but at a higher expense ratio. For instance, Boston Trust Equity (BTEFX) and BNY Mellon Appreciation-Inv (DGAGX) have slightly lower one-year returns of 24.85% and 23.72%, respectively, but boast lower expense ratios of 0.85% and 0.89%. Bright Rock Quality LargeCap-Inst (BQLCX) outperforms with a 26.88% return, yet also maintains a lower expense ratio. Despite these comparisons, FRDPX’s focus on rising dividends and large-cap exposure provides a unique value proposition for investors prioritizing dividend growth.
Investor Suitability: Who Should Consider FRDPX?
FRDPX is particularly well-suited for investors seeking a blend of growth and income through exposure to large-cap stocks with a history of rising dividends. Its focus on financially sound companies with strong dividend growth potential makes it an attractive option for those looking to enhance their portfolio’s income component while maintaining exposure to equity markets. The fund’s lower volatility, as indicated by its beta, may appeal to conservative investors who prioritize stability over aggressive growth. However, potential investors should consider the fund’s higher expense ratio and evaluate whether its performance aligns with their investment goals.
Sector Allocation: Emphasizing Growth Sectors
The sector allocation of FRDPX highlights its strategic emphasis on growth-oriented sectors. With a significant portion of its portfolio invested in Technology (26.44%) and Industrials (18.06%), the fund is positioned to benefit from technological advancements and industrial growth. The Health Care sector, comprising 16.51% of the portfolio, adds a layer of stability and potential for consistent returns. This diversified sector allocation aligns with the fund’s objective of achieving long-term capital appreciation through investments in companies with rising dividends, offering a balanced approach to growth and income.
Conclusion: The Unique Appeal of Franklin Rising Dividends-A
In conclusion, Franklin Rising Dividends-A (FRDPX) stands out for its focus on large-cap stocks with a history of rising dividends, offering a compelling option for investors seeking a combination of growth and income. While the fund’s higher expense ratio and negative alpha may be points of consideration, its strong sector allocation and lower volatility make it a viable choice for conservative investors. With a robust portfolio of technology and industrial stocks, FRDPX provides a unique opportunity to capitalize on dividend growth while maintaining exposure to stable, financially sound companies. Investors should weigh these factors against their individual investment objectives to determine if FRDPX aligns with their portfolio strategy.
Similar Securities
FCEUX: Franklin US Core Equity-Adv | Growth-Focused Large Cap Fund
FCEUX offers a low 0.01% expense ratio and strong 1-year return of 43.18%, focusing on U.S. large-cap equities with a tech-heavy portfolio.
STSEX: BlackRock Exchange BlackRock | Growth-Focused Large Cap Fund
STSEX offers a diversified large-cap portfolio with a focus on growth, featuring a competitive expense ratio and strong tech sector allocation.
LCEAX: Invesco Diversified Dividend-A | Equity-Income Large Cap Value Fund
LCEAX offers a diversified large-cap value portfolio with a 1.48% yield and a focus on equity-income, suitable for conservative growth investors.
TILCX: TRPrice LargeCap Value-I | Undervalued Large-Cap Growth
TILCX offers undervalued large-cap exposure with a 0.57% expense ratio, focusing on growth and income.
PREIX: TRPrice Equity Index 500-Inv | S&P 500-Like Returns with Low Fees
PREIX offers S&P 500-like returns with a low 0.19% expense ratio, focusing on large-cap stocks for growth and income.
Futher Reading
https://finance.yahoo.com/quote/FRDPX/”>Yahoo: Franklin Rising Dividends-A
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